Financial Data and Key Metrics Changes - For full year 2025, the company reported net income of $824 million, up 19% from $695 million in 2024. Earnings per diluted share increased to $11.40 from $10.31 in 2024, and tangible book value rose by over $13 to nearly $89 a share [5][6][10] - Total assets at year-end were just over $71 billion, with fourth quarter net income reaching a record $223 million, up 3% or $7 million from the prior quarter [5][6] Business Line Data and Key Metrics Changes - Loan growth for the fourth quarter was approximately $1 billion, representing 8% growth on an annualized basis, while deposit growth was also $1 billion, reflecting a 7% increase [9][10] - For the full year, loans and deposits grew 11% and 10% respectively, with net interest income reaching a record level due to a $1.1 billion increase in average earning assets and a four basis points increase in net interest margin [9][10][12] Market Data and Key Metrics Changes - The company moved into third position in deposit market share in the Chicago area, with strong gains in Wisconsin and West Michigan [7] - The credit quality remained solid, with non-performing loans increasing slightly but remaining manageable, indicating a stable credit environment [16][17] Company Strategy and Development Direction - The primary objective for 2026 is to continue delivering solid and consistent financial performance, with expectations of mid to high single-digit loan growth funded by similar deposit growth [19][20] - The company plans to invest in tools, technology, and personnel to support growth while maintaining a stable net interest margin around 3.5% [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding local economies, with low unemployment levels and a solid quarter for loan growth [26][27] - The company remains focused on organic growth, with a disciplined approach to potential acquisitions, and is monitoring the competitive landscape closely [42][43] Other Important Information - The company has a buyback plan of over $200 million authorized, which could be utilized if organic growth opportunities do not present themselves [50] - The mortgage warehouse business is expected to remain stable, with potential upside if the mortgage market improves [75][76] Q&A Session Summary Question: Can you talk about loan growth and what drives mid to high single-digit growth? - Management indicated cautious optimism based on local economic conditions and strong loan growth momentum, despite typical seasonal softness in the first quarter [26][27] Question: What are the expectations for operating leverage and expense plans for 2026? - The company expects revenue growth of 7.5%-8% with expenses growing at 4%-5%, aiming for positive operating leverage [30][31] Question: How is the competitive landscape affecting deposit costs? - Management noted effective management of deposit costs in response to Fed movements and a favorable trend in DDA deposits [36][37] Question: What are the expectations for the mortgage banking outlook? - The company remains optimistic about the mortgage market, anticipating potential increases in volume and gain on sale margins if rates decrease [91][92] Question: What is the company's stance on M&A activity? - The focus remains on organic growth, with opportunistic consideration for smaller acquisitions if they arise [43][44]

Financial Data and Key Metrics Changes - The company reported GAAP net income of $3.3 million, or $0.11 per unit, for Q1 2025, significantly impacted by $3.9 million of non-cash unrealized losses on interest rate derivatives [13] - Cash available for distribution (CAD) was reported at $7.1 million, or $0.31 per unit [13] - The book value per unit decreased to $12.59, down $0.56 from December 31 [15] - Unrestricted cash and cash equivalents increased significantly to $51.4 million from $14.7 million as of December 31 [16] Business Line Data and Key Metrics Changes - The investment portfolio had no forbearance requests for multifamily mortgage revenue bonds, with all borrowers current on payments as of March 31, 2025 [8] - Physical occupancy for the stabilized mortgage revenue bond portfolio was at 89.5% [8] - The company funded $60.6 million in mortgage revenue bonds and related investments during Q1 [20] Market Data and Key Metrics Changes - The U.S. Municipal bond market faced challenges, with investment-grade tax-exempt bonds being the worst-performing fixed income asset class in Q1 2025 [28] - The ten-year MMD was at 3.33% and the thirty-year MMD at 4.4% as of the latest close, reflecting an increase from previous months [29] - Total fund flows for Q1 2025 were positive at about $11 billion, but April saw $3.6 billion in outflows [32] Company Strategy and Development Direction - The company is focusing on deepening relationships with existing sponsors and establishing new ones, particularly in affordable housing construction lending [33] - The partnership with BlackRock is aimed at capitalizing on opportunities in the construction lending space due to a pullback from commercial banks [33] Management's Comments on Operating Environment and Future Outlook - Management noted that uncertainty in the municipal bond market continues, influenced by tariffs and potential changes in federal funding programs [30][31] - The company expects to monitor the impact of legislative changes on municipal credit ratings and valuations [36] Other Important Information - The company successfully issued $20 million of Series B preferred units in March 2025 [26] - The debt investment portfolio consists of mortgage revenue bonds, governmental issuer loans, and property loans totaling $1.29 billion, representing 84% of total assets [19] Q&A Session Summary Question: Will proposed shifts from federal to state/local governments affect muni credit ratings and valuations? - Management indicated it is still early in the process and that discussions are ongoing regarding potential changes in funding allocations [36][38] Question: Have tariffs impacted the BlackRock JV business? - Management stated that there have been no significant changes in pro formas from sponsors due to higher tariffs on construction materials [41][42] Question: Are gains from JV sales expected to be lower than in previous years? - Management acknowledged that insurance costs significantly impacted the sale of the Tomball asset, but the Halodis asset did not experience the same increase in expenses [45][46] Question: How is the partner Vantage holding up given lower profitability? - Management noted that Vantage's business model includes developer fees, which helps mitigate the impact of lower gains on sales [50][52] Question: Can you provide an update on gross ROEs in the MRB and GIL business? - Management indicated that the hedging program has stabilized funding costs, leading to relatively constant ROE expectations [54][56]